Uncertainty surrounds us—and the experience of recent years shows it is easier to underestimate than overestimate it.
For our strategic choices to lead to sustained success, the key is not predicting the outcome of single, near-future events but understanding the dynamics of change in our context. This article suggests the idea of having a taste of the future and sketches out three scenarios to illustrate what this involves.
At the onset of the 2020s there are two things we can count on: we will continue to experience turbulence and disruptions in numerous markets; and predictions and forecasts will fail to anticipate many of them.
In that context, the most dangerous thing we can do is to make strategic choices based on the assumption that we can predict key features of the future relevant to our success.
Awareness of uncertainty can result in decision procrastination or paralysis
The uncertainty that surrounds us has grown as the speed of change increases – in large part thanks to technology – and unexpected ricochet effects are becoming more pervasive due to growing social, political and economic interdependence.
It is critical to be aware of the uncertainty around us but there is also a danger that awareness of such uncertainty results in decision procrastination or paralysis.
Future scenarios provide a useful antidote to both the perils of ignoring uncertainty or being overwhelmed by it. They do not attempt to predict the future; rather they explore the future not in the singular but in the plural, providing a basis for exploring the "what if" of alternative paths forward.
Future scenarios provide a useful antidote to the perils of ignoring uncertainty
The more successful and competent we feel, the more likely we are to assume continuity and predictability around us. But decision makers in all kinds of domains have found that the root of some their worst mistakes has been to think – often implicitly – that they knew what the future would look like.
That neither strength nor ability but being adaptable to change is what ensures survival is a widely accepted notion, generally taken to come from Darwin’s work on evolution. But even with that in mind it is easy to fall into the trap of assuming that change is easily recognisable, often appearing modest and gradual… until its radical consequences emerge.
Scenarios provide a way of amplifying signals of change, increasing our alertness and providing insights into possible (and not necessarily likely) major alterations of the world around us. Such sensitivity to change is crucial to recognising muted signals and being prepared for prompt, decisive responses.
The more successful and competent we feel, the more likely we are to assume continuity and predictability around us
The precursors of today’s use in business of scenarios to improve strategic decision making were oriented toward national security (for military or "soft power" strategic purposes) and many national security organisations are still quietly using them.
An interesting exception is the National Intelligence Council in the USA that has been doing scenario exercises every four years over the last two decades, using the process to engage with a wide range of experts around the world and making much of the resulting work available on its website.
Scenarios have also been used to inform public policy making; these are often focused on specific sectors or issues but an example of a more sweeping approach is that of the Government of Singapore, which regularly conducts broad scenario exercises and has also developed impressive expertise (at the Centre for Strategic Futures) to help different parts of the government explore the implications of those scenarios as well as conduct ad hoc scenario exercises.
Scenarios provide a way of amplifying signals of change
In the corporate world, Shell has been a pioneer in the use of scenarios; the work done there and by the diaspora of its scenario teams has greatly influenced scenario methodology and practices.
The set of scenarios developed at Shell in the early 1970s helped it navigate major turmoil in the oil market and convert the insights gained from the scenarios into a very significant competitive advantage.
Corporations in all sectors have relied on scenarios to explore opportunities, develop products, shape market trends, anticipate challenges and manage risks. But Shell is relatively unique in both the extent of their scenario effort and the amount of material resulting from it that has been made publicly available on their website.
Corporations that could well regret not having used scenarios to probe more incisively into potential future paths for their markets might include Kodak and Nokia.
Scenarios have been described as an opportunity to “visit” the future that helps ready reactions to the unexpected and also as an entry point for strategic mindfulness that improves early sensitivity to change signals.
Scenarios have been described as an entry point for strategic mindfulness
Inspired by the role that food plays in year-end holidays, let’s think of scenarios as a way of getting a taste of the future.
Indulging in a tasting across different possible futures will equip us to better appreciate the different possibilities ahead and to rehearse in our minds the responses, enhancements and mitigations that will get us to turn whatever ingredients come our way into successful recipes.
The point, however, is not to look for tastes that we like—confusing what the future may bring with what we would wish it to be like is a dangerous trap. Instead it is to have the discipline to taste different combinations of ingredients that we may have to face and rehearse our response to those sensations—even if it is about making lemonade.
Indulging in a tasting across possible futures will equip us to better appreciate the different possibilities ahead
The term scenarios is often used to describe something else: variations around a base case set of projections or forecasts. That kind of sensitivity analysis has its usefulness, but it also carries with it the limitations, namely its base case.
The kind of scenarios discussed here do not represent partial departures from central paths to the future, rather different sets of logic concerning how key uncertainties are resolved and intersect with each other.
For a number of years, the Esade-CEMS master’s programme has offered an intensive scenario course. There are two points that many of these graduate students highlight at the end of the course.
The first is that scenarios – contrary to most of what business schools teach and management consultants practice – are not about looking for answers but about a relentless search for probing questions in order to explore potential change factors, i.e., an opportunity.
Scenario exercises start with the selection of key uncertainties
The second is that the search for these factors needs to have broader horizons than those implied by the conventional strategy frameworks (think five forces and the like), even if at first it seems far-fetched.
Scenarios are also distinct from war games, although these can be usefully layered on top of scenarios to explore competitive responses. Right now it would certainly make sense to be doing war games around the confrontations with Iran or North Korea, or whatever other political, military or economic situation is triggered by the impulsive decisions of Donald Trump.
But our scenario sketches for 2030-2035 focus on the exploration of longer-term dynamics and more structural changes and tend to have a time horizon of at least ten years. This means that, concerning decisions emanating from Washington, they do not revolve around the November 2020 presidential election but about drivers of deeper change.
Scenario exercises start with the selection of key uncertainties: factors of change that have both significant impact potential and for which the path and outcome are quite uncertain.
In our culinary metaphor, the key uncertainties are the ingredients for our meal and the different recipes and menus (not all using the entirety of the ingredients) then provide a taste of the potentially widely divergent paths that the future can take.
The menus that we will consider briefly, by way of example of “tasting” the future, are global and very broad, intending to make them versatile. Depending on our setting and appetite, each of the menus can then be explored for different implications.
We start with five baskets of ingredients and for each we identify basic alternative outcomes for our chosen 2030-2035 time horizon, using shorthand end-points to illustrate the range of uncertainties around them.
We rely on these ingredients to construct three menus, with the ingredients positioned at different points along the uncertainty continuum. The aim is to make them all plausible but also as different from each other as possible so we can experience a wide range of taste combinations.
The value of the menus (scenarios) lies mainly not in the sensations we get from each individually but rather in the comparison and the different reactions and perceptions they trigger in us.
Menu 1: Sour
The 2020s saw numerous confrontations – commercial, political and technological – and at the start of the 2030s there was much mistrust among governments, the world was split into factions (think an economic version of the Cold War) and international organisations were in severe disarray—even with a more sane US president since 2025, the damage had been so extensive that repairs would take a long time to have a solid effect.
In this future scenario, at the start of the 2030s the world would be split into factions
The mega-corporations that seemed poised for continued world dominance in 2020 were soon after that hobbled by a combination of anti-trust and nationalistic forces.
In that context, economic growth suffered, financial markets experienced much volatility, and technology adoption and innovation slowed.
Supply chains have been severely disrupted and reshaped while global brands and corporations only succeed if they can mimic the geopolitical fragmentation.
Strong states imposed restrictions on activists in many countries and were not inclined to indulge in far-sighted, collaborative action on climate change, in spite of the growing frequency of freak natural events. This is a world of official hurdles and leaves its inhabitants with quite a sour set of tastes.
Menu 2: Hearty
Successful lobbying by the large digital platform corporations (mainly based in the US and China) has resulted in a retreat from policies of exclusion.
These large corporations have become more like empires with vast resources that have been deployed to promote (and capture) technological innovation as well as establishing strong market positions.
Their financial firepower has allowed them, and their founders and shareholders, to become generous – via public project partnerships and private philanthropy at unprecedented scale – trying hard through the 2020s to be viewed less with suspicion than with respect as good global citizens.
They have become advocates for improved quality of life – supporting the use of technology to deal with pollution and emissions – even if the root causes have not been tackled decisively enough.
Artificial intelligence is not the job-killer than some predicted back in 2020
Technology has also helped improve people’s lives around the world and concerns with privacy have for the most part taken a back seat to convenience.
Artificial intelligence was not the job-killer than some predicted back in 2020 and is mostly complementing rather than replacing humans, although by 2030 it has resulted in even greater polarisation of the job market.
The economic bonanza that technology has spawned allowed many countries to expand their safety nets, reduce the working week and improve basic services but in spite of that there is widespread dissatisfaction as inequality continued to grow virtually everywhere, so by 2030 it remains a considerable threat to social and political stability in many countries.
This is a world of hearty tastes and private empires where the key to business success is figuring out "win-win" intersections with the digital empires.
Menu 3: Zesty
Concerns over inaction on climate change and growing inequality had been brewing since the late 2010s and came to a boiling point early in the 2020s.
Civil activism gathered strength rapidly and by 2025 citizens (even in unexpected quarters) had successfully mobilised to push their governments for concerted urgent action on climate change: by 2030 a tipping point had been reached and reductions in carbon emissions were starting to materialise.
Many people were also reflecting climate concerns in their personal choices with sweeping implications on food production, travel and packaging.
Civil activism gathers strength rapidly and by 2025 citizens successfully mobilise to push their governments for urgent action on climate change
Concerns over inequality remained high through the 2020s and although by 2030 there had been little actual progress to report, a number of measures had been put in place to tax the hyper-rich as well as to curb fiscal arbitrage by large digital corporations and place controls over their market and data-hoarding power.
Progress on climate agreements and action had also resulted in a return of inter-governmental trust and created the basis for a renaissance of international organisations, including a new focus on principles to manage data and machine learning.
All this has come at a cost: requiring significant public expenditure, slowing economic growth and spiking interest rates. But this is a zesty world in which a civil tempest has provided hope for fresh air and corporate reputations will be paramount to retain customers and attract talent.
These three "tastes" are just sketches, highlighting just a few angles of the features differentiating the three worlds and intended to illustrate the potential uses of scenarios to consider the different situations we could face in the path toward 2030-2035. On such basis, we can then explore "what if" questions around strategic choices relevant for our business, organisation… or even personally.
Of course, we will only face one future in 2030-35 and we will not be able to choose the menu that will shape its flavour. But having tasted different menus – including items that we have liked and some that we have detested – we will be in better shape to react promptly and make successful strategic choices than we would without that experience.
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